Fix and Flip Loans in Florida: How the Money, the Permits and the Exit Fit Together

Short answer

A fix and flip loan in Florida is a short-term, business-purpose loan that funds part of the purchase of an investment property plus a rehab budget paid out in draws, sized against the after-repair value (ARV) and paid off when you sell. It is never for a home you will live in. In Florida, the deal also has to survive permits, licensed-contractor rules, flood-zone limits on how much you can spend, insurance inspections at resale and closing taxes on both ends, so plan those numbers before you make an offer.

How a fix and flip loan is structured

A fix and flip loan is a hard money loan built to buy, renovate and sell. Our hard money loans in Florida guide covers usury limits and lender basics. This page is about running the project.

Most flip loans have three moving parts:

• Purchase money. The lender funds part of the price at closing. You bring the rest, plus closing costs.
• Rehab holdback. The renovation budget is approved up front but held by the lender. It is released in draws after an inspector confirms each stage of work is done.
• Payoff at sale. Payments are usually interest-only, and the balance is due at the end of a short term. Your sale, or a refinance, pays it off.

Leverage, points, draw fees and extension fees vary by lender and track record. Rates vary daily; call 305-425-1990 for today's pricing.

Draws are cash flow. Most lenders reimburse finished work, so you front each stage. Ask how many draws there are, how fast inspections happen, what each costs, and whether interest runs on the full holdback or only on released funds.

ARV: the number the whole deal hangs on

ARV, the after-repair value, is what the property should sell for once the work is done. The lender's appraiser estimates it from your scope of work and recent sales of renovated homes nearby, and the loan is capped against it. Each lender sets its own cap.

A simple way to test a deal before you offer:

• Start with a conservative ARV from closed sales, not listings.
• Subtract the rehab budget plus a contingency for surprises behind the walls.
• Subtract buying costs, selling costs and every month of holding costs (next sections).
• What is left is your margin. If it only works at the top comp, it does not work.

South Florida comps are very local, and a flood zone line can split a street. Use comps that match the zone, lot and finish level you plan to deliver.

Permits, licensed contractors and the owner-builder trap

Unpermitted work can kill a flip. Florida's DBPR warns that missing permits or proof of work can make a home hard to sell.

Hire licensed contractors and check them yourself. DBPR tells consumers to verify any contractor at myfloridalicense.com or in the DBPR mobile app, by name or license number. Unlicensed activity can be reported at 866-532-1440. Your lender will also want the contractor's license and insurance in the file before releasing draws.

Do not plan to pull permits as an owner-builder on a flip. Florida's owner-builder exemption, s. 489.103(7), is for owners building or improving property for their own use, with the property not offered for sale or lease. If the owner sells or offers the property for sale within 1 year, the law presumes the work was done for sale, and the exemption does not apply. A flip is, by design, for sale.

Record a Notice of Commencement. Under s. 713.13, the owner records it with the county clerk before work starts and posts a copy on site before the first inspection. Lenders may require it before the first draw. Collect lien releases from contractors and suppliers at each draw.

Flood zones and the 50% rule

Check the flood zone before you write the offer, not after. In a special flood hazard area, a big rehab can trigger the FEMA substantial improvement rule, often called the 50% rule.

How the City of Miami Beach applies it, as of October 2026: it adds up job values of permits issued over 1 year and divides by the property value from the Miami-Dade Property Appraiser or a certified depreciated replacement cost appraisal. At 50% or more, the whole structure must meet current flood and building code rules for new construction, which can mean elevation, flood-resistant materials and flood vents.

Each community measures it differently. Lee County, for example, uses the assessed value of the structure without land. Call the local floodplain manager before you set the scope.

On an older, low-value house in a flood zone, a full gut can cross 50% fast and turn a cosmetic flip into an elevation project.

Insurance: build for the buyer's 4-point and wind-mit

During the rehab, lenders usually require builder's risk or vacant-dwelling coverage.

The bigger issue is your buyer. Their lender needs homeowners insurance, and Florida insurers inspect older homes. Citizens Property Insurance, as of October 2026, requires:

• A 4-point inspection (roof, electrical, plumbing, HVAC) for homes more than 20 years old.
• Proof of at least five years of remaining useful life on roofs older than 25 years (shingle) or 50 years (tile or metal), or proof of a full replacement.

So spend rehab money where the inspector looks first: roof, electrical panel, plumbing and HVAC. A house that passes a 4-point is easier to insure, finance and sell.

A wind mitigation inspection documents features like roof-to-wall connections and opening protection that can earn premium discounts. After a new roof or impact windows, get one and give it to buyers.

Holding costs and Florida closing taxes on both ends

Every month costs money: interest and draw fees, property taxes (no homestead exemption on an investment property), builder's risk or vacant insurance, utilities, HOA dues and extension fees if you run past the term.

Florida also taxes the paperwork, as of October 2026:

• On your loan (at purchase): documentary stamp tax of $0.35 per $100 on the note or mortgage (s. 201.08) and nonrecurring intangible tax of 2 mills on the mortgage amount (s. 199.133). On a $300,000 loan, that is $1,050 plus $600.
• On the deed (at sale or purchase): $0.70 per $100 of the price (s. 201.02). In Miami-Dade the rate is $0.60, plus a surtax of up to $0.45 on deeds that are not for a single-family residence (Fla. Admin. Code 12B-4.012). On a $450,000 single-family sale, that is $3,150 statewide or $2,700 in Miami-Dade. Who pays it is set by your contract.

Add commissions, title and buyer concessions for your true selling cost. More on the Florida doc stamp tax.

Business purpose only, and how QMS Lending helps

Fix and flip loans are business-purpose loans. Under the CFPB's Regulation Z commentary, a property is not non-owner-occupied if the owner expects to live there more than 14 days in the coming year. To move in, use a consumer loan such as an FHA 203(k) or conventional loan.

Keeping it as a rental? A DSCR loan can refinance based on rent; ask about seasoning. Need to close before another sale? See bridge loans.

QMS Lending (NMLS #1781090) is an independent mortgage broker in Miami, FL, with 100+ lenders, including private investor lenders. We compare leverage, points, draw rules and extension costs side by side. See fix and flip loans or call 305-425-1990, in English or Spanish. Subject to credit and property approval.